The US government is auctioning off approximately 660 bitcoins, which it has seized from defendants in a wide range of criminal and civil cases, according to a notice from the US Marshals Service.
$200,000 Entrance Fee
The coins are worth a total of $4.3 million at the current price, according to coinmarketcap.com. Minimum deposit for entering the auction is $200,000 (about 30 BTC).
In all, 31 different cases are mentioned in the report.
The US Marshals Service is the enforcement arm of the federal courts. Founded in 1789, it is the oldest federal law enforcement agency in the country, but despite its historical roots, it is already old hat when it comes to offloading ill-gotten bitcoins.
Its biggest haul came in 2013 when the Tor-based online market Silk Road was shut down. Its operator, Ross Ulbricht, was sentenced to grow old and die in a prison cell.
From Ulbricht, the authorities took 144,341 BTC, and from Silk Road’s servers 29,656. The US government made about $48 million from selling these off over the following two years. Had it waited, it would have made a lot more; a government representative said at the time that investment was never the aim.
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Going, Going, Gone
The Silk Road saga did not only affect the US. The Finnish government found itself in possession of 2,000 BTC in June 2016, confiscated from one Lasse Juhani Kärkkäinen, who now languishes in prison for selling narcotics on the site.
In February 2018, just after the price of Bitcoin peaked, that government decided that the coins should be auctioned.
Silk Road aside, the US Marshal Service made the US government $1.6 million from auctioning 2,700 BTC in August 2016 (interestingly, back then, a $100,000 deposit was required to enter), and an eye-watering $45 million from 3,813 BTC in January 2018.
15 Percent of All Cryptocurrency Stolen
More than $800 million worth of cryptocurrency has been stolen this year so far, according to Reuters, and some estimate that as much as 15 percent of all cryptocurrency has been stolen since 2012.
It is not always easy for a government to get its hands on cryptocurrency in a criminal case. In May 2018, the South Korean government was forced to redefine its legal classification of Bitcoin just so it could take possession of 191 bitcoins from a sex offender.
And apart from this, and media-grabbing sting operations notwithstanding, the majority of stolen cryptocurrency is never even reported – Lex Sokolin of Autonomous NEXT told Reuters that it could be as many as 85 percents of cases.
This is because the authorities often don’t know what to do. One well-known example is what happened to Michael Terpin, an American entrepreneur who was taken for approximately $24 million in cryptocurrency in January 2018. He decided to initiate legal proceedings against telecommunications company AT&T, which gave a copy of his SIM card to the hackers, because when he had $60,000 stolen on an earlier occasion, the FBI never got back to him, according to Reuters.